Hotelier Paddy McKillen jnr’s bid to set aside a bankruptcy summons over an alleged €2.1 million debt is set to be rejected, a judge has indicated.

Judge Liam Kennedy on Monday said the “direction of travel” was that he would reject the application to dismiss a summons seeking the bankruptcy of McKillen jnr, issued by lender Herbert Street Finance (HSF). The judge indicated he would allow HSF’s bankruptcy petition against McKillen jnr to proceed.

The judge told barristers Niall Ó hUiginn, for HSF, and Keith Farry, for McKillen jnr, he would issue a full written judgment on the set aside application in the coming seven days. He adjourned the case to October.

Issued in January, the summons, a first step in bankruptcy proceedings, alleged McKillen jnr would have committed an act of bankruptcy unless he paid an alleged debt of €2.1 million or applied to have the summons dismissed on grounds he was not indebted to HSF in any sum, or only in the sum of €20,000.

HSF claimed the €2.1 million debt arose on foot of McKillen jnr covenanting to pay on demand the obligations of his Cool Dust Ltd firm to HSF, up to a maximum of €3 million.

The lender claimed sums of €2.3 million were received in part payment of Cool Dust’s obligations, but about €2.14 million remains due and owing, plus daily interest.

McKillen jnr denies he is indebted to HSF in any sum exceeding €20,000.

In the set aside application, heard in May, McKillen jnr’s lawyers argued a court must set aside a bankruptcy summons if the debtor raises a real and substantial issue to be tried in plenary proceedings.

McKillen jnr raised several issues, including claims the alleged debt was overstated, and the loan was illegal because it was allegedly not a commercial loan made by a registered credit institution, but one extended to McKillen jnr personally.

Lawyers for HSF submitted there was no evidence to support McKillen jnr’s claim that the loan was illegal.

In a separate lawsuit issued in March, McKillen jnr, of Torquay Road, Foxrock, Dublin is disputing liability for the alleged €2.1 million debt. He says a December 2022 facility agreement between Cool Dust, himself and HSF is void and unenforceable, and no sum is due by him to HSF.

HSF is contesting those proceedings. The case was admitted to the fast-track commercial division of the High Court in May.